Update: Flipkart has raised $550 million from some of its existing investors, in a deal that now values the company at about $15 billion, reports The Wall Street Journal . According to the report, the latest round of funding, was led by US-based Tiger Global Management.

The funding pushes Flipkart to the third position among the most valuable privately-held startup companies in the world, alongside U.S.-based data-mining company Palantir Technologies and messaging platform Snapchat Inc., according to a WSJ/ VentureSource analysis.

After fueling itself with a fund of $1.9 billion last year in three rounds, Flipkart is yet again set to get a major financial boost by closing a funding round of $550 million (Rs 3,500 crore) at a valuation of nearly $16 billion.

According to sources, the funding will be closed before the month-end, with participation from existing investors. The round would be led by Tiger Global with $100 million.The other investors participating in the session are- Qatar Investment Authority, DST Global, GIC, Naspers, Accel Partners and Steadview Capital.

“This could be the penultimate round of funding before Flipkart explores raising more money in the form of debt later this year,” said one of the sources, reports ET. However, Flipkart hasn’t yet commented on the matter yet.

The funds raised last year, amplified Flipkart in the battle against players like Softbank-backed Snapdeal and US-based Amazon, for dominance in the Indian online retail market which is estimated by UBS to be worth $50 billion by 2020. However, despite being flushed with funds, Flipkart’s competition in the market is only increasing with each passing day. One of the biggest examples of this scenario, is the entry of Paytm in the eCommerce sector.

Cut-throat competition amongst eCommerce companies to gain dominance, makes the market look fertile and desirable. But what about profitability?

A research by Goldman Sachs, claims that profitability in the Indian eCommerce avenue is still a distant dream. According to the report, Flipkart and Snapdeal collectively need to raise Rs 1.27 lakh crore over next five years to sustain growth.While raising funds may not be difficult, investors are enamored with Indian e-tailers, the estimate indicates they would need to continue achieving top line momentum of more than 100% growth even as profits elude.

So far, online retail in India has been characterised by deep discounting, which has served to lure customers but also resulted in high cash burn rates and heavy losses. Jabong for example, more than doubled its revenue to Rs 811 crore during calendar year 2014 but deep discounting led to a five-fold increase in losses to Rs 160 crore.

Similarly, the history has been a witness to the casualties of a number of eCommerce companies which have succumbed to heavy discounting strategies.

Beside discounting, these companies are expending outrageously on customer acquisition strategies like TV ads, print, billboard and radio ads.

According to a report by Google, currently, 20% of the Indian population are online, out of which 100 million would convert into digital customers by 2016. The scenario thus, evokes a pivotal question- how much of expenditure would be required to acquire them?